tv First Business KICU November 1, 2013 4:00am-4:31am PDT
president obama launches a plan to attract investors from abroad. in today's cover story..... why the public sector is going on a hiring spree.... and... how to sidestep some of the biggest holiday travel traps... plus.... in traders unplugged-- the guys tell us whether investing in digital money is worth the risk. first business starts now! good morning! it's friday, november 1st. in today's first look: stocks continue to drop. for the second session in a row the market fell. yesterday, the dow lost 73 points, the nasdaq 11, s&p 6. gold tumbled 27
dollars and oil 53 cents. still it was outstanding october. the s&p rallied 4.5% the nasdaq up 3.9% and dow up 2.8% amoung earning after the close-- aig and first solar. aig shares fell 3% on earnings that topped estimates but the sales number fell shy of estimates. first solar-- doubled profits and raised its outlook that stock shot up 7% as we wrap up the week, lincoln ellis of green square captial joins us now from the floora semigroup to talk about today's market action a hand what is your outlook for november? > well november will be a bit of a position squaring month we think. we have had a very significant run over the course of the last two weeks and getting ahead of both the selling that happens for a tax reasons and other reasons in december as well as what's going to transpire on the budget and the debt ceiling in january. we will see a lot position
squaring this month. lincoln we are seeing some weakeness in the market. how do you suppose that this friday will go? > i think that's the beginning of we're seeing in terms of this position squaring. people taking some chips off the table realizing that the bottom line organic growth and equity in companies is not really happening. looking at some the weakness in the underlying economy really beginning to reassess where they're putting their money to work. what was your best trade last month? > last month we really continued to like the energy space the midstream part of the piperuns the mlp's. we put it through center coast capital which is a fund where the amlp which is the e t f. good to have you on the show, have a great day! >thank you. as a new month begins today-- it also marks the end of an added boost to food stamps. roughly 48 milion americans depend on food stamps to make ends meet. starting today.. the amount they recieve will decline as much as $36 dollars per month. it's happening because a temporary benefit boost given to low income americans in 2009 on the heels of the finanicial crisis.
expires today. government spending on food stamps is one of the biggest sticking points on capitol hill as lawmakers debate the farm bill. despite sequester, despite a government shutdown, many government agencies are open for business and granting government contracts to small businesses. our cover story finds it's not all federal work, but it pays just the same. you're watching the government contract equivalent of 'speed dating.' small business representatives have ten minutes to make their pitch to the department of energy, fermi lab and other agencies needing to outsource. this year, american express pulled together a nationwide total of five- thousand one-on-one meetings-- however brief. but subcontracting can also have drawbacks despite these hard lessons, toledo's company, midwest moving and storage pursevered and has earned ten million dollars relocating government
facilities. despite these hard lessons, toledo's company, midwest moving and storage pursevered and has earned ten million dollars relocating government facilities. and despite overall cuts in federal contracts,--this year, it's down 35-billion or about 6% from 2009 levels, women- owned businesses are doing pretty well. they're up a half- billion dollars from 2009. about 40-percent of the work-- from state and local agencies, where the buddy-system in business is still encouraged. last year, those one-on-one meeting led to 40-million requests for proposal, the next step. from that, about seven million contracts were granted.
president obama wants attract more foreign companies to invest in america the president made the remarks in dc yesterday to u.s. business leaders. the president's plan is to streamline the government's "select usa" program by creating a single point person for foreign investors as a way to cut down on bureaucracy. the hill.com reports.. conservative republican groups remain against any legislation with the government meddling in the marketplace. a key manufacturing gauge soared in october, lifted by strong orders and construction activity. the chicago purchasing managers index jumped to 65.9 in october, up from 55.7 the previous month. readings above 50 indicate expansion. manufacturing has been at a
standstill since the summer. analysts worried that the government shutdown slowed orders and stopped factories from replenishing inventories. but in october both are on the rise and going strong. "we had heard that people were forgoing business because inventory was too low so there was replenishing. there was also some r&d done this year for new products that were rolling out in the fall. those were hitting and being very successful. we're also hearing success on new distribution channels - big box companies, websites, those are having some success." alyce andres-frantz of m-n-i... says that warm fall temperatures in chicago boosted construction and tourism sectors last month. skeptics are looking to the institute of supply management index and future payroll reports for a clearer indication of the strength of the nation's manufacturing sector.
mastercard leads the way in today's roundup of earnings.. the credit card company reported a 14% profit pop as more people around the world used plastic instead of cash. at exxon-- weakness in the refining business hurt earnings.. but the oil giant still came in with profits at $7.8 billion dollars. avon'had a tough quarter according to the ceo. the beauty products company fell a nickle short of estimate. the ceo blamed the economy on a slowdown in consumer spending. cigna turned in very healthy profits-- and raised its guidance for the rest of the year as it picks up clients through health care reform.. the government is calling in backup for healthcare dot gov. google, oracle and red hat are some of the companies that have reportedly sent engineers to fix the troubled healthcare site its been a rocky start for the exchanges due to technical problems.
officials assure americans the sites can and will be fixed. a spokeswoman for the centers for medicare and medicaid confirms "dozens" of contractors have been brought to help fix the site. puerto rico is in a debt crisis - and it's attracting investors. municipal bond prices have fallen nearly 40 percent. so-called "vulture investors" are swooping in and buying the bonds at rockbottom prices, betting on a turn around. distressed greek bonds turned out to a huge win for risk takers.. the federal aviation administration plans to relax rules regarding electronic devices. passengers can leave e-readers and smartphones powered on, but on airplane mode during takeoffs and landings. .previously -- the f-a-a was concerned leaving electronics on would cause interference. it says it will implement the changes soon. passengers are paying more to travel during the holidays. jeanenne tornatore of orbitz joins us now... good morning jeanenne!
what's a good booking strategy? as airlines tack on fees-- what should passender carrying gifts do? are airlines any kinder to families looking to sit together? ideas for people who might want to go away for thanksgiving or christmas? where are people going? some good deals airfare...when to book? "being the first weekend of november, we really need to look at booking airline tickets, especially for the thanksgiving weekend. as we get into this very intensely booked travel weekend, all of the seats tend to be full, so the sooner you book the better." how do you travel with gifts? "traveling with gifts can be a little tricky. you're not - or you shouldn't - wrap your gifts if you're going to check them, whether it's in a checked bag or a carryon bag because the tsa can unwrap them if they see it as necessary. another big paying point for consumers over the holidays is the checked bag fee and a lot of people will put their presents in a checked bag to send them. orbitz actually just launched in late october a new rewards program and as part of that, a really cool promotion for the holidays
helps ease those checked bag fee pains. it's called zap that bag. if you book your holiday travel by the end of november and you take a picture when you're traveling of your checked bag receipt with an app on your phone, they'll immediately deposit $25 in your reward account that you can then use to book a hotel over the holidays. so it's just an example of something a travel company is doing to kind of help travelers ease that frustration because they know that so many people really can't get around paying that $25 over the holidays." are airlines any kinder to families looking to sit together? "well it's really tough over the holidays because there are fewer seats available many times on the flights that families will want to take and that's one of the reasons i highly recommend, especially for large groups or families that want to sit together, to book early and try to get those seats together because if you do wait until the last minute it's going to be very tough. unfortunately when travelers are able to choose their seats, airlines aren't as able to accomodate their requests at that time."
thanks jeanenne ! "thanks, angie" airline fees are soaring..airlines raked in a record 42.6 billion in extra fees this year, up nearly 18% from last year. and fee options are everywhere. from printing your boarding pass to boarding early or choosing a seat that's more comfy, some carriers charge extra for each of those. baggage fees are also climbing, and now comprise a quarter of all ancillary revenue at airlines. it may soon by so long to 747 jumbo jets boeing is slowing production of the iconic flying machines due to less demand. 747's have been around for 40 years. boeing is said to be putting more emphasis on more fuel efficient aircraft. still to come with a wine shortage on the
horizon....which commoditiy are traders pouring money into now. plus... it's been voted one of the top places to work for more than a decade...but will it be a winner for investors?. you wouldn't know it on wall street....but main street is signaling trouble. find out why after the break, with bill moller. see these hands? they gripped the wheel of a humvee in afghanistan. these hands? six years treating soldiers. twelve years, flying choppers. my hands? they're here for the person who fought in afghanistan.
i made the call and got support for my sister. my hands are here for the person who treated those soldiers. i helped connect my son with the care he's earned. mine take care of the person who flew those helicopters. and if life gets overwhelming they're ready to dial the veterans crisis line. the veterans crisis line is here for all veterans and their loved ones. call 1-800-273-8255 and press 1. or chat online at veteranscrisisline.net
how bad was that governments impact last month? well, we have a lot of anecdotal evidence. but now some real numbers are coming out as to how its impact has affected small businesses it turns out it was a major body blow, expecially to the smallest of small businesses. the data come in the sure payroll small business scorecard for october. michael alter is president and ceo of sure payroll. who are these small business owners? what kind of businesses? > these are the small businesses you see one main street that you interact with everyday. the local dry cleaner and your local insurance agent. this makes up the majority as what we define as small businesses in america? > right, 98 percent of all small businesses have less than a hundred employees. 80 percent of them have less than nine that's who you see. who you see on main street are our employers. michael, you take a look at the stock market and earnings would suggest " what's wrong? "
companies are enjoying these times. > certainly from the stock market from the of evaluations you are seeing out in silicon valley that true. however, real small businesses those folks on main street that we just talked about their the ones that are really hurting, their the ones that really impacted by this government shut down. we see it in numbers. put some numbers to it, what does it look like? > if you look and hiring, month after month down .1%. if you look at the average paycheck: flat, month to month. if you look at optimism how confident they are in the future, 62%. they may seem like a high number, but its not really when you think about these small business owners. these other optimistic. by nature their glass is half full. so these are full that to expect to be in the 80 90 percent positive about the future, so 62 is not great. that's quite a difference from the blipped impact as we had as most people from their impressions as a shutdown the did. but for these people the
small-business owners, it was a real hardship that they're going through. how long before things turned around? > some of it has to do what it does to their perception. they're gonna make decisions about investing in their business, about hiring employees based on how they see the future, and right now they're not optimistic about it. a lot of it has to do with what congress did, right? 9 and 10 small-business owners don't feel that congress is helping them in any way. two-thirds of them would not vote for the congressman again. if there was an election right now? > if there was an election right now. so i mean i guess that some good for moving companies in the d.c. area but, it certainly not good for us overall. this uncertainty continues to be a terrible blow to small businesses. > absolutely. michael alter, thanks so much. > thanks for having me. thanks for the update bill... the retailer popular for keeping customers organized opens for trading today. the container store will trader under ticker symbol: t-c-s on the new york stock exchange. shares priced in at the high end at $18 dollars. employees will share in the ipo profits. the container store has made fortune magazines best places to work list 14 years in a row. coming up.... the traders debate whether betting on bitcoins is a safe play for your money... and later... will transportation stocks deliver disappoint ahead of the holidays? we'll be right back.
this is the way "we" celebrate fridays. joining us from the floor of cme group-- alan knuckman and andrew keene are standing by for traders unplugged. you guys are looking aggressive today.. let's get going to topic number one monet money - hedge fund guy recently spent 43 million for a monet, the water lillie's, so do you find is this irrational exuberance in the stock market? > i think they're two lessons with this. number 1: the guy that bought this was a hedge fund manager worth $2 billion so from a risk standpoint if he spends 43 million and is worth 2 billion that's only 2 percent of his portfolio, so that's the proper risk allocation in case a trade goes bad. it also shows the there's a lot of money to be made in these markets. > > it's a lot of money to be made one stock all want to talk about, we've been talking about fine art. sotheby's b-i-d that stock is headed to 55 and then
higher it just came from 49. it was activist play in there. i think it's gonna go higher it's going to 55. > i think it's going to 75. once it does about 55 its going to 75. topic 2 2) bit o' cash - a norwegian man casually invested $26 in bitcoins- now that eventually turned into nearly 1 million dollars. where would you invest your money? > > not bit coins, those aren't safe. i mean you can buy lottery tickets. the u.s. stock market does not ever go down if. it's s spider man curve. everyone ask's me all the time if the market's overbought or completely over bought. yes, but it continued to go higher. i think it will go higher, we are bought at every deal possible > i'm bullish, that's of bad sign typically. when you can't think of any reason the market's gonna go down. i like the euro's currency, the euro's currency has come back to 136 at breakup point. 140 is the year term target from its four point range it's been. that's only that halfway point of the 160 high of 2008 to those lows. topic 3 despite a bumper crop of grapes in chile---we are hearing wine shortage around the world. so is your glass half empty on commoidities? > this comes back down to supply and demand. very simply
speaking, the old world country france, spain, and italy are growing less and less and are making less and less wine each year. but you're getting expansion, guess where; china. china is the key here. they only drink to bottles per captive if that goes up anywhere where we are the demand is huge. china is the big play the fxi is the way to play china. it's down 6% on the year, where our markets up 30%. > > i think it depends on the commodity. i'm not bullish gold that all, not bullish silver at all. copper is also over bought in china. >so what are you bullish? > >oil! long term, bread, and oil. and natural gas. > commodities are like the cubs. wait till next year. because it's always a growing season. there are all these issues to worry about with mother nature so let's see what happens next year. bonus round question:
container store is expected to ipo today... we have had some tremedous market debuts this year. which "one" of the following "did" not double on ipo day: a- potbelly b- burlington coat factory c- sprouts farmers market d-noodles and company > > i think it's b, i'll take b >i take potbelly's > >potbelly's dead i think it's burlington coat factory up 40% in ipo day, thanks alot guys. > >thank you. first business continues right after this.
tim biggam of trading block joins us now on chart talk to talk about some stocks that could be headed for reverse, good to have you on the show. > always great to be here angie, thank-you. you were watching stocks of just u-p-s and fed-ex the transports, so what do you see happening here? > absolutely we have seen the market have such a heck of a rally so far. the transports are actually outperforming the overall s and p 500 by a large extent here. stocks like fedex have been up until recently 12 straight days, finally showing a little pull back. i'd look for that weakness to finally continue. that rally may have stronged here and really looking for a pullback of 10 to 12% before i would be interested in names like fedex, u-p-s, or generally the transports in well specifically. but let's be clear. you would not mind owning the stocks. you just load to buy these stocks at lower levels. so let's talk about some of those levels,
where do you see it? > absolutely, as always price does matter although in a momentum driven market it doesn't seem to. but from a value perspective, i'd be looking for around fedex. you know you're looking at probably somewhere $8 per-share putting somewhere around a 16 multiple on that, that will put it somewhere around 120 range i would probably be interested. about 10% drop from here, ups similarly they just came out they just met on both sides; revenue and touch light, earnings beat by a penny. probably looking at about a 10 percent pullback on ups the high 80s here and the overall transports from wales kind of a similar pull back. i think they kind of have gotten way ahead of them selves on a valuation perspective. have a great friday and thank you for that! > thank you angie. it's time for us to close up shop for this week.. coming up on monday-- the price you will pay this winter to heat your home. from all of us at first business.. have a wonderful weekend.
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